Walls Closing In On IRS With New Ruling In Favor Of Pro-Israel Group

A court decision handed down earlier this week by an Obama appointed judge will force the IRS to disclose the procedures it used to target the pro-Israel group, Z-Street, and may shed more light on how other conservative groups were unfairly scrutinized.

Z Street’s lawsuit was filed years before the IRS scandal hit the news and before even the conservative media understood how badly the agency had become weaponized under Obama.

On Tuesday, Federal Judge Ketanje Brown Jackson issued the first substantive ruling in any suit that challenged the IRS’s pose of political neutrality under the Obama administration. The case concerns Z Street, a Philadelphia area-based pro-Israel organization that filed for tax-exempt status in December 2009 because of its role in educating the public about Israel and the Middle East conflict. The group’s founder Lori Lowenthal Marcus wrote in the Jewish Press this week about what followed:

On July 19, 2010, when counsel for Z STREET spoke with the IRS agent to whom the organization’s application had been assigned, that agent said that a determination on Z STREET’s application may be further delayed because the IRS gave “special scrutiny” to organizations connected to Israel and especially to those whose views “contradict those of the administration’s.”

Z Street subsequently sued the government and rightly argued that its constitutional rights had been violated because of the “viewpoint discrimination” that the IRS agent had openly displayed. Now after years of delays, Judge Jackson has ruled that by asserting that Z Street had no right to sue, the government had tried to “transform a lawsuit that clearly challenges the constitutionality of the process … into a dispute over tax liability.” She similarly dismissed the government’s claims of sovereign immunity.

This ruling means the IRS will be forced to open their books on the procedures it used to review Z-Street’s tax exempt application and as the case proceeds, the entire picture involving other groups similarly targeted may become clearer.

As Tobin notes, “using the IRS to punish political foes is blatantly illegal.”

If, as we suspect, the Z Street case reveals the sort of internal email traffic that will reveal how widespread this practice has become in the last five years, perhaps even a liberal mainstream press that still thinks the problems at the IRS are a “phony scandal” will start to pay attention.